First Time Landlord Looking For Advice

[Steven Alvarado]

Hi,

I recently got my primary residence leased out this month. I’m excited about it but lacking the knowledge behind being a landlord and the responsibilities that come with it. Curious if anyone had some Do/Don’ts , specific items to keep track of or wish you had done when you started. Sadly, ill have little to no cash flow on this property due to mortgage vs rent income. I had my property listed September 2021 and while doing research, discovered the possibility of being able to tax deduct for those months while the property was vacant and on the market. I was looking to hire a CPA in the Houston area for next year but wasn’t sure if it was worth doing for 2022 tax season also. My goal is to eventually invest into more properties or businesses to generate more passive income.

[Tyler Fontaine]

What up what up,

Im glad you're making some moves. Im curious your cashflow vs expenses. If your tight there then plan on personally stacking up reserves from your income to prepare for things that will go wrong. 

Regardless, there are things you should be doing as a new landlord. I'll rapid fire some things for you.

First, start researching how to manage a property/tenants and so on. A lot of this is learning how to work with and manage people effectively. (Your tenants, contractors, your business relationships)

You have already rented but make sure your lease has been used before and been put through the ringer. This should not be a quick random google print out. BP actually offers some contracts on the site.

Also, you want to make sure that the security deposit is held in the appropriate account based on what your local laws are. They vary from state to state. Some times it has to be in an interest bearing account, sometimes it doesn't matter, lots of times you cannot commingle other funds with it etc.

You should've done a "move-in condition statement" prior to tenant move in. Then a "move-out condition statement" when they vacate. That's the only thing that will hold up in court if there are issues with security deposits/property damage when they move out. 

I would say to be sure you start to study and learn the tenant/landlord laws in your area. It will help so that you know your rights and what you can actually do.  

Do NOT accept cash as form of payment for rent. No venmo, no CashApp. You should be using something that will keep track of payments, provide receipts, and easily accessible at any time. Apartments.com, RentRedi.com, Appfolio.com, and many more are available to you to do this. If you must accept cash for rent - go to staples and get a stack of invoices/receipts and ensure your tenant gets one every single time they pay you. Have them sign it if possible and keep your copy of it. Scan it and upload it so they are readily available and organized. If you do not do this and the tenant tells you, "I left the money in the mailbox... You took it, i'm not paying twice.", then you are screwed and it becomes and issue to collect.